“More Subprime and Non-QM Lenders are making their way into Residential Lending”
Many of us in the mortgage broker world have been predicting for a long time that this will keep happening and why not, these lenders charge a higher rate and that is why they are willing to take more risk.
I am not surprised one bit. Most QM lending continues to be more restrictive so all the talk about lending guidelines and restrictions continue to get tougher, not the other way around. It is not one bit shocking that homeownership is at the lowest level in nearly 50 years.
It is often hard for me to recommend some of these types of loan products; rates are higher, much higher in many cases. I recently got a quote for a client where the rate was going to be 7.5% and the loan had a two year prepayment penalty. When I was asked what they should do, I recommended waiting 12 months, working on the credit and getting a much better loan at that time.
This is a bit extreme, as many of them will fall into rates in the 5% to 6% range with terms that are more acceptable and are a good option until we can refinance them out of this kind of loan. No matter what, while we wait to get out of it working on the issues is crucial.
At least there are options and there will be more of them, but also at higher rates.
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Joe Petrowsky, NMLS #6869
Right Trac Financial Group, Inc. NMLS #2709
110 Main St.
Manchester, Ct. 06042
Office: 860 647-7701 x116
Fax: 860 647-8940
Cell: 860 836-9294
Joe Petrowsky does not guarantee nor is in any way responsible for the accuracy of the information provided herein, and provides said information without warranties of any kind, either expressed or implied.
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